Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Long Ideas

Lockheed-Martin is working on Compact Fusion

If you’re looking for a really long speculative play, Lockheed Martin (NYSE: LMT) has announced it could be close to commercializing the ultimate disruptive technology – fusion.

The defense contractor and aerospace giant’s Skunk Works, the secret workshop that gave us the Stealth Bomber, is working on a compact fusion reactor. Lockheed Martin has announced that it could have a working prototype of a compact fusion reactor within five years.

1,000 Times More Power than the Bloom Box

That would be super disruptive because the Skunk Works’ fusion reactor would be about the size of a cargo container, but generate 100 megawatts worth of power. A standard diesel electric locomotive generates three to five megawatts of electricity.

One of the Skunk Works’ mad scientists with the compact fusion device. As you can see it is small enough to fit in a ship or even an airplane.

In contrast, Bloom Energy’s solid oxide fuel cell powered Bloom Box, or Energy Server, generates 100 kilowatts of electricity. A megawatt is one million watts, or 1,000 kilowatts. That means if it works, the Skunk Works’ fusion device would generate 1,000 times as much energy in the same space as the Bloom Server.

The Lockheed Martin technology would also be far cheaper and smaller than the other well-known fusion technology out there, the International Thermonuclear Experimental Reactor (ITER) Tokamak, which is now under construction in France. The Tokamak would weigh 5,100 tons and cost $50 billion when it is built, so it wouldn’t be much better than present day fission powered nuclear power plants. Like the Tokamak, Lockheed Martin is trying to develop a fusion device based on magnetic containment; the Skunk Work team believes it can use modern computer assisted design to speed up the development process and cut costs.

News articles indicate that Lockheed Martin plans to first use the fusion device for military purposes, probably to power warships, then to realize is it for commercial use in about 20 years, although it will probably appear faster if it’s all it is cracked up to be.

The device would put both the coal and traditional nuclear power out of business fast if it works. Lockheed Martin’s engineers claim that the fusion reactor would be one million times more powerful than any chemical reaction and three to four times more powerful than fission, yet it would not create any pollution.

Bezos also Interested in Fusion

One person who is surely smiling at this is Elon Musk; if it works, fusion would provide the perfect source of electricity for electric cars like his Tesla (NASDAQ: TSLA). It could also power his spaceship to Mars if he ever gets around to building it.

As you can see Lockheed-Martin’s compact fusion seems to live up to its name.

There’s no word on how much the Lockheed Martin Fusion device would cost, but I have a feeling they would not announce it if they were not really confident in it. The effects of this development upon the entire energy industry would be completely disruptive.

The effect on society as a whole would be incredible. Just imagine, virtually unlimited amounts of super cheap energy. That’s great news for manufacturers of electronic gadgets, but bad news for those who mine coal for a living.

It could also be really good news for Lockheed Martin investors. The company has not been doing that well lately; its revenues have been falling for over a year. Lockheed reported a TTM revenue of $47.29 billion in September 2012 that fell to $45.92 billion in September 2013 and $44.60 billion in September 2014.

Nor is Lockheed Martin the only corporate titan interested in fusion. guru Jeff Bezos has invested $19 million in a privately traded company called General Fusion, which is trying to perfect a magnetic based fusion process similar to the one Lockheed is working upon.

It looks like the ultimate disruptive technology could soon become a reality. One has to wonder what else is under development out there.